Chipotle Mexican Grill, Inc. (CMG) recently posted robust first-quarter 2010 results that topped the Zacks Consensus expectation on the heels of strong top-line growth buoyed by higher traffic count and new restaurant openings, sending the stock up $5.80 or 4.6% to $132.55 in after-hours trading on Wednesday.
The quarterly earnings of $1.19 per share outpaced the Zacks Consensus Estimate of 95 cents, and soared 52.6% from 78 cents in the prior-year quarter.
Denver, Colorado based company, Chipotle said that revenue for the quarter rose 15.6% to $409.7 million driven by new restaurant openings and increase in comparable-store sales.
Comparable-store sales growth has been decelerating since second-quarter 2008 when it increased 7.1%, showing resilience in a sluggish environment. After reaching the lowest point of 1.7% in the second-quarter 2009, the comps have been on the rise. Comparable-stores sales climbed 4.3% in the quarter under review, reflecting a sequential increase of 230 basis points.
For fiscal year 2010, management now expects mid-single digit comparable-store sales growth, up from its previous guidance of flat comps.
Restaurant operating margin expanded 260 basis points to 26.1% driven by lower food, labor and operating costs (as a percentage of total revenue).
Chipotle Mexican Grill has remained largely unruffled by the recent economic slowdown. In fiscal 2010, the company plans to open 120 to 130 new restaurants, reflecting a growth of 12.6% to 13.6%. In fiscal 2009, the company opened 121 new restaurants and closed 2 locations, reflecting a net growth of 14.2%.
During the quarter under review, the company opened 20 restaurants, and currently operates 976 outlets.
Chipotle ended the quarter with cash and cash equivalents of $193 million and shareholders’ equity of $734.4 million.
We believe Chipotle is well-positioned to expand rapidly and generate improved earnings, margins, and returns on invested capital.
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